Costs and Earned Value
Chapter 7 Exercises Name __Sherry Smith____________
1. Given the following information for a one-year project, answer the following questions. Recall that PV is the planned value, EV is the earned value, AC is the actual cost, and BAC is the budget at completion.
PV ¼ $ 23,000
EV ¼ $ 20,000
AC ¼ $ 25,000
BAC ¼ $ 120,000
a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?
Cost Variance = EV-AC = $20,000 - $25,000 = -$5,000
Schedule Variance = EV-PV = $20,000 - $25,000 = -$3,000
CPI = EV/AC = $20,000/$25,000 = 80%
SPI = EV/PV = $20,000/$25,000 = 87%
b. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?
Project is over budget, behind schedule
c. Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned?
EAC = BAC/CPI=$120,000/.8=$150,000
d. Use the SPI to estimate how long it will take to finish this project.
Estimated Time to Complete= 12 Months/87%=13.8 Months, 1.8 Months longer than planned
e. Sketch the earned value chart for this project, using Figure 7- 5 as a guide.
PV $23,000
EV $20,000
AC $25,000
BAC $120,000 CV - $5,000
SV - $3,000
CPI 80%
SPI 87%
EAC $150,000
Estimated time to complete 13.8
2. Download the file called Ch07EX2 from ANGEL. Open Ch07Ex2 in Excel and calculate your projected total costs, total revenues, and total profits for giving a seminar on cost estimating. Make the following assumptions:
You will charge $ 600 per person for a two-day class.
You estimate that 30 people will attend the class, but you want to change this input.
Your fixed costs include $ 500 total to rent a room for both days, setup fees of $ 400 for registration, and $ 300 for designing a postcard for advertising.
You will not include your labor costs for this estimate, but you estimate that
1. Given the following information for a one-year project, answer the following questions. Recall that PV is the planned value, EV is the earned value, AC is the actual cost, and BAC is the budget at completion.
PV ¼ $ 23,000
EV ¼ $ 20,000
AC ¼ $ 25,000
BAC ¼ $ 120,000
a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project?
Cost Variance = EV-AC = $20,000 - $25,000 = -$5,000
Schedule Variance = EV-PV = $20,000 - $25,000 = -$3,000
CPI = EV/AC = $20,000/$25,000 = 80%
SPI = EV/PV = $20,000/$25,000 = 87%
b. How is the project doing? Is it ahead of schedule or behind schedule? Is it under budget or over budget?
Project is over budget, behind schedule
c. Use the CPI to calculate the estimate at completion (EAC) for this project. Is the project performing better or worse than planned?
EAC = BAC/CPI=$120,000/.8=$150,000
d. Use the SPI to estimate how long it will take to finish this project.
Estimated Time to Complete= 12 Months/87%=13.8 Months, 1.8 Months longer than planned
e. Sketch the earned value chart for this project, using Figure 7- 5 as a guide.
PV $23,000
EV $20,000
AC $25,000
BAC $120,000 CV - $5,000
SV - $3,000
CPI 80%
SPI 87%
EAC $150,000
Estimated time to complete 13.8
2. Download the file called Ch07EX2 from ANGEL. Open Ch07Ex2 in Excel and calculate your projected total costs, total revenues, and total profits for giving a seminar on cost estimating. Make the following assumptions:
You will charge $ 600 per person for a two-day class.
You estimate that 30 people will attend the class, but you want to change this input.
Your fixed costs include $ 500 total to rent a room for both days, setup fees of $ 400 for registration, and $ 300 for designing a postcard for advertising.
You will not include your labor costs for this estimate, but you estimate that